Analog Devices (ADI) Q4 2023 earnings summary

Executive summary

• FY2023 revenue was $12.306B; adjusted gross margin was 72.5%, adjusted operating margin 48.9%, and adjusted diluted EPS $10.09.

• Sustainability and manufacturing resilience priorities included expanding capacity, increasing renewable energy use, reducing emissions and water intensity, and diverting manufacturing waste from landfill.

Financial highlights

• FY2023 revenue was $12.306B, compared with $12.014B in FY2022.

• Gross margin was 64.0%; adjusted gross margin was 72.5%, and adjusted operating margin was 48.9%.

• Diluted EPS was $6.55; adjusted diluted EPS was $10.09.

• Operating cash flow was $4.818B and free cash flow was $3.556B, equal to 39% and 29% of revenue, respectively.

Outlook and guidance

• Long-term environmental targets include Net Zero by 2050 or sooner, a >50% absolute Scope 1 and 2 emissions reduction by 2030, and 100% renewable energy at manufacturing facilities by 2025.

• The target is to reduce fab Scope 1 emissions 75% by 2026 and water withdrawal intensity 50% by 2027, both measured against stated baselines.

• Capacity investments target doubling wafer production output in the U.S. and Europe by end-2025, including expansions in Beaverton, Limerick, and Camas.

• A Climate Transition Plan, including climate scenario planning and risk assessment, was targeted for 2025.